From: Sacred Causes: The Clash of Religion and Politics, From the Great War to the War on Terror, by Michael Burleigh (HarperCollins, 2007), pp. 142-146:

Another European state to receive the Vatican’s blessing was the ‘State of Estates’ – or ‘Standestaat’ in German – created by Engelbert Dollfuss in the ruins of the first Austrian Republic. Since the turn of the century, Austrian politics had been dominated by a clash between ‘Red Vienna’, where the atheist and militant Social Democratic Party held sway, and the provinces, where the parties that made up successive governing coalitions – that is, the Christian Socials, the Pan-Germans, and the Agrarian League – had their greatest support. In this respect, Austrian politics resembled other countries with a ‘Red’ metropolis hated by many provincials, notably Berlin and Madrid in the same period, although it is important to note that since the days of Mayor Karl Lueger the Christian Socials had support among Vienna’s petit-bourgeoisie who were drawn to his demagogic antisemitism, antiliberalism and deference towards the Catholic Church. The intellectual and political leadership of the Party was also based in the capital….

Both the Christian Socials and the Social Democrats had large paramilitary armies, which were soon augmented by the strong-arm groups of the Austrian National Socialists. The Christian Socials (and in some places the Pan-Germans) were close to many of the regionally based ‘home defence groups’, or Heimwehren, originally established after the war to protect villages from looters and deserters. These had evolved into a strike-breaking force financed by the employers and armed by the Italians and Hungarians. In the Korneuburg Oath, which they swore in May 1930, the Heimwehr leaders resolved to replace democratic government with an authoritarian corporative system modelled on the ideas of the political economist Othmar Spann. In 1923 the Social Democrats formed their own Schutzbund, after the Heimwehr had crushed a strike in Styria. The nature of the problem faced by the state becomes clear from the fact that its army of thirty thousand men faced sixty thousand members of the Heimwehr and ninety thousand equally well-armed members of the Schutzbund. In 1927, following the acquittal of Heimwehr men accused of murdering socialists, the latter stormed and set fire to the Courts of Justice during three days of rioting. The Heimwehr threatened a Fascist-style March on Vienna. Austria’s domestic disturbances were intensified by the obtuseness of France and the Little Entente in blocking a customs union with Germany.

In May 1932 Engelbert Dollfuss, an able peasant boy and war hero who had risen to be agriculture and justice minister, was appointed chancellor. At thirty-nine he was Europe’s youngest head of government; at four feet eleven inches he was also the slightest in stature. Dollfuss immediately negotiated a foreign loan of 300 million Schillings, only to find that the Pan-Germans voted against it, on the ground that renunciation of union with Germany was among the loan’s conditions, while the Social Democrats also refused to support the government out of doctrinaire bloody-mindedness. He achieved a narrow majority only by bringing Heimwehr leaders into his cabinet…. Dollfuss turned to Italy and the Vatican for external support against Hitler…. Rather than relying for mass support on the Christian Socials, on 20 May 1933 Dollfuss established a new Fatherland Front, which was supposed to absorb all existing right-wing potential into one governing party, along the lines already essayed by Primo de Rivera in Spain and Piłsudski in Poland in the 1920s and by Salazar in the 1930s.

The regime faced two challenges: one from the left, which it won, and another from the Nazi ‘brown Bolsheviks’, which it eventually lost. In February 1934, the Heimwehr arrested Schutzbund leaders and expelled representatives of democratic parties from provincial diets. In Linz, the Social Democrats decided to fight back, and met police incursions into their headquarters with machine-gun fire. In Vienna, the socialist leadership dithered so that the general strike they declared was imperfectly implemented against a regime that was well prepared for just this eventuality. Martial law was proclaimed while Heimwehr troops surrounded working-class suburbs. A full-scale shooting war ensued, with artillery and tanks firing into housing projects with such resonant names as ‘Bebelhof’, ‘Liebknechthof’ and ‘Karl-Marx-Hof’. One hundred and ninety-six workers were killed and 319 wounded, with 118 dead and 486 wounded on the government side. The government banned the Social Democrat Party and neutralised the trades unions by subsuming them into its own corporatist entities. Socialists were expelled from the national and provincial civil service. Courts martial were used to sentence twenty-one people to death – one of the nine eventually executed being taken to the gallows on a stretcher. Even Hitler managed briefly to occupy the moral high ground when he condemned ‘the criminal stupidity of letting people shoot down socialist workers, women and children’. The Vatican secretary of state, Pacelli, intervened in vain on behalf of those sentenced to death.